Sustainable trade expansion in Latin America

Analysis and assessment

An empirical and policy assessment that highlights recent changes in trade policy and focuses on the sectoral impacts from these changes, their likely environmental consequences, and opportunities to promote more sustainable trade strategies.

Executive Summary

This report and its companion data tables provide for the first time a set of indicators to evaluate the impacts of trade on environment in the Latin American and Caribbean region. These estimates cover 14 pollution categories, over 8 exporting sectors for 16 countries.

The study focuses on how trade and expansion can facilitate and complement environmental sustainability in the region. It is based on two key observations:

Trade, both within the region and with the rest of the world is expanding rapidly, generating increases in incomes per month.

Trade-led growth will create both challenges and opportunities for environmental quality and natural resource conservation.

The overall impact of trade on the environment is one that is not easy to discern, as it depends on a variety of factors, including the efficiency with which resources are allocated, the scale of production, the composition of outputs, technology, and, last but far not least, policy. Ultimately, the political will to impose regulatory and liability discipline on environmental problems will determine whether trade liberalization enhances welfare. At the same time, trade policies should be constructed to minimize environmental problems.

Companion Report: "Estimates of Industrial Pollution Related to Total Export Production in Latin America"

Within this companion report, by WRI authors Paul Faeth and Patricia McGinnis, estimates are provided for the release of fourteen categories of pollutants related to production and export for eight major industrial sectors in sixteen countries in the region. An interpretation of the information in this report is provided by the authors.